Dear Tutor,
I have a question regarding answers to questions about hedging using option or futures. Sometimes BPP in answer shows just percentages when working out effective annual cost of loan (e.g. Alecto BPP Revision Kit) without calulating actual numbers. Its obviously quicker way (e.g. for premium we show only % cost instead of multiplying % by number of contracts and contract size). My question is, is it acceptable technique for exam, can i expect full marks showing only calculation with %?
Thank you
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Answers to Option/Futures hedging question in percentage terms
It really depends on exactly what the question asks for. If it is not specified, that showing the answer as a % will get the narks :-)
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